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This Week's Bonus Content

It's Time to Take Profits on These 2 Overbought Energy Stocks

Written by Dan Schmidt. First Published: 4/11/2026.

Key Points

Energy has been the top-performing sector so far in 2026, riding the oil price spike to a massive gain of over 25% after years of underperformance.
But now that a potential ceasefire between the United States and Iran has been reached, the upside in energy stocks appears to be fully priced in.
Broadly, energy investments are starting to get overbought, and for the following two stocks, it might be time to take profits.
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A fragile ceasefire appears to have been reached between the U.S. and Iran, which pushed down oil prices and helped stocks gain more than 2% following the announcement. That momentum has continued: the S&P 500 is up more than 3% since the ceasefire news broke on Tuesday, April 7.

The development highlights the ever-changing nature of geopolitical conflicts, but it also underscores the importance of taking profits on unexpected gains. Now that the energy sector looks extended, it may be time to take profits on some of 2026’s early winners.

Geopolitical and Technical Signals Indicate a Break in Energy's Rally

Energy has been the best-performing sector in 2026 by a wide margin. The Energy Select Sector SPDR ETF (NYSEARCA: XLE) is up nearly 30% year-to-date (YTD), a move that would have had a larger impact on the S&P 500 in past decades. But with the explosive growth of the Magnificent Seven and other mega-caps, the energy sector now accounts for less than 5% of the cap-weighted index. As a result, this year's leadership from energy hasn’t been enough to offset weakness elsewhere in the index.

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With a tenuous ceasefire in place, the sector looks overextended and could lose several of the catalysts that drove gains earlier in 2026. Here are a few reasons investors may want to consider trimming energy positions.

The first challenge is a fading geopolitical risk premium. Even before the ceasefire, the rally was beginning to show signs of fatigue. Futures markets imply oil above $90 per barrel through December, pricing in structurally higher fuel and petroleum costs. Much — though not all — of the extra profit for oil and gas producers appears priced in, and de-escalation, combined with renewed enforcement of tolls for passage through the Strait of Hormuz, is a headwind.

Another risk is demand destruction. West Texas Intermediate futures briefly reached $115 before settling around $95 after the ceasefire announcement. While consumers obviously prefer $95 oil to $115, $95 is still significantly higher than the sub-$60 levels seen at the start of the year. Prolonged prices near $100 will compress margins at airlines and other transportation companies, and price spikes tend to take months to filter through to the broader economy. High prices won’t help energy stocks if consumption falls.

Lastly, technical indicators point to waning momentum. After the XLE's Relative Strength Index (RSI) reached 80, it plunged below 50 in less than two weeks, signaling a sharp loss of bullish conviction. Some large-cap energy names remain above the 70 overbought threshold, which could warrant profit-taking.

If the price-shock component of the oil crisis is ending, it could trigger a sell-off in overbought energy names. The two companies below have reached new highs, but now that the geopolitical tailwind has eased, both show growing fundamental and technical vulnerabilities.

Suncor Energy: Share Buybacks Mask Declining Revenue

Suncor Energy (NYSE: SU), Canada’s largest integrated oil and gas company, has benefited from the crude surge, which has obscured some underlying issues. Suncor missed revenue projections in its Q4 2025 earnings report, with revenue down 3% year-over-year to $8.77 billion.

The company has repurchased more than 12% of its float during its current buyback program, which may have kept the share price elevated ahead of this price shock. The next earnings report is scheduled for May 5.

Technical headwinds are also present. A double-top pattern on the daily chart often precedes a pullback. The RSI moved into overbought territory in March but has since fallen to its lowest level in months, and the Moving Average Convergence Divergence (MACD) shows a bearish crossover that confirms the momentum shift.

Entergy: Bullish Catalysts Appear Fully Baked In

Entergy (NYSE: ETR) has ridden the broader energy surge despite being a utility. But after roughly a 25% YTD gain, many of the company’s catalysts are either not yet contributing to revenue or are already priced into the stock.

Entergy has a contract with Meta Platforms (NASDAQ: META) to supply power and infrastructure to a large Louisiana data center, but that agreement has not yet meaningfully boosted current earnings. In its Q4 2025 report, Entergy missed slightly on both earnings per share and revenue, while reaffirming expectations for an 8% compound annual growth rate through 2029. An 8% CAGR would be attractive for a utility, but ETR currently trades more like an energy stock, with a price-to-earnings ratio near 29 and a price-to-sales ratio above 4.

If the energy rally fades, ETR’s momentum is likely to follow. The technical chart shows buying pressure easing after a late-March surge, which could presage profit-taking. The RSI remains in the overbought range, and the MACD indicates growing volatility as its lines widen. If bullish momentum dissipates, investors may begin to question owning a utility trading near 29 times forward earnings.

This Week's Bonus Content

More Than Just Dirt: Caterpillar Is the AI Stock Nobody Saw Coming

Written by Jeffrey Neal Johnson. First Published: 4/23/2026.

Key Points

Caterpillar's exceptional market performance is fueled by sustained global infrastructure spending and the industrial reshoring trend.
The company has established itself as a critical technology partner by providing essential backup power generation systems for the expanding AI data center industry.
A long history of dividend increases and a significant share buyback program underscore a strong commitment to delivering shareholder value.
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While market growth stories often focus on software and digital platforms, a powerful — and potentially more durable — trend is unfolding in heavy industry. The companies that build the physical world are reaching unprecedented valuations as a notable market rotation into tangible assets gains momentum.

This shift has moved beyond a simple recovery narrative and is now driven by accelerating global spending on a broader definition of infrastructure, one that includes both traditional projects and the digital backbone of the modern economy.

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Caterpillar (NYSE: CAT) is a prime example of this industrial sector's resurgence. With Caterpillar’s stock price up roughly 40% year-to-date and approaching record levels, it has significantly outpaced broader market averages. This performance suggests investors are increasingly rewarding businesses with strong, reliable cash flow that play a direct role in building and powering global commerce.

For market watchers, the long-term outlook for heavy machinery appears to be building on a new and remarkably solid foundation.

Performance in a World Under Construction

Sustained demand for Caterpillar's iconic yellow equipment is driven by two powerful, parallel forces. The first is a global push to modernize infrastructure — not only high-profile rebuilding of roads, bridges, and airports, but also the critical, less-visible upgrades to electrical grids and water systems.

The second force is industrial reshoring. As companies move manufacturing and supply chains back to North America and Europe to improve resilience, demand for new factories, warehouses, and logistics hubs has created a long-term construction boom. These macro drivers translate directly into Caterpillar’s strong financial metrics, creating a clear link between real-world activity and stock performance.

This cause-and-effect relationship shows up clearly in Caterpillar’s recent results, which paint a picture of operational strength:

Dominant market performance: Shares of CAT are trading just below their 52-week high of $820.20, reflecting more than a 170% gain over the past 12 months. This momentum indicates investor confidence in Caterpillar’s strategic direction and its ability to execute.
Explosive earnings power: In its most recent quarterly report on Jan. 29, Caterpillar beat analyst expectations with earnings per share of $5.16. Revenue rose 17.9% year-over-year to $19.13 billion — growth levels that stand out for a mature industrial company.
Exceptional profitability: Caterpillar operates with notable efficiency, evidenced by a best-in-class return on equity of 45.76%. This metric shows how effectively management is using shareholder capital to generate profits, a key indicator of a well-run company.

CAT’s High-Tech Growth Engine

Caterpillar's modern growth story goes beyond its traditional identity as a construction equipment maker. Several forward-looking catalysts position the company to benefit from high-growth industries, directly linking its future success to the evolution of the digital and automated economy.

The most significant of these drivers is Caterpillar’s Energy and Transportation segment, which supplies essential backup power generation systems for artificial intelligence (AI) data centers. These facilities consume massive amounts of electricity and require uninterrupted power, making industrial-scale generators mission-critical. As global AI computing demand expands, so does the need for reliable energy — placing Caterpillar at the center of the digital infrastructure build-out.

At the same time, Caterpillar is pivoting toward automation and technology-integrated solutions. The recent acquisition of a self-driving tractor startup signals this shift. The move is not just about futuristic tech; it’s a calculated entry into higher-margin, recurring software and services revenue. By equipping machines with autonomous capabilities, Caterpillar can move from one-time equipment sales to long-term service and subscription models, improving customer efficiency and creating more predictable revenue streams.

This growth thesis is complemented by a strong commitment to returning capital to shareholders, reinforcing the company's appeal to long-term investors.

A member of the Dividend Aristocrats, Caterpillar's 30-year track record of consecutive dividend increases underscores its role as a reliable dividend compounder across economic cycles.
The company's current annual dividend of $6.04 per share is supported by a conservative payout ratio of about 32%, indicating the dividend is well-covered and has room to grow.
An active $20 billion share buyback program approved in mid-2024 continues to reduce shares outstanding, which can increase the value of remaining shares over time.

Weighing the Opportunity in a Market Leader

The evidence suggests Caterpillar has evolved from a purely cyclical industrial company into a diversified infrastructure and energy-technology leader. Its recent performance validates the underlying strength of the physical economy and demonstrates its ability to adapt to new, higher-growth sources of demand.

Market analysts increasingly recognize this transformation. While the consensus rating from 24 analysts remains a Moderate Buy, price target upgrades from major firms such as Truist ($920) and Jefferies ($900) suggest meaningful upside could remain. These targets reflect growing confidence in data center and reshoring trends as long-term revenue drivers.

Investors should weigh the full picture. CAT’s beta of 1.52 indicates it has historically been more volatile than the market, and its results remain tied to the global economy. However, that risk is balanced by powerful operational cash flow and strategic positioning in sectors with secular tailwinds.

For those seeking exposure to the industrial economy, Caterpillar’s combination of growth catalysts and shareholder returns presents a compelling case. More cautious investors may prefer to wait for a pullback before entering, while those with higher risk tolerance might view the current momentum as a signal of sustained strength.

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Sunday, April 26, 2026

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WARNING: Explicit Language – Truth Behind Trump’s “Crazy” Post

It's Time to Take Profits on These 2 Overbought Energy Stocks

Key Points

Geopolitical and Technical Signals Indicate a Break in Energy's Rally

Are we ignoring the same signal Wall Street ignored in 1929? (Ad)

Suncor Energy: Share Buybacks Mask Declining Revenue

Entergy: Bullish Catalysts Appear Fully Baked In

More Than Just Dirt: Caterpillar Is the AI Stock Nobody Saw Coming

Key Points

Are we ignoring the same signal Wall Street ignored in 1929? (Ad)

Performance in a World Under Construction

CAT’s High-Tech Growth Engine

Weighing the Opportunity in a Market Leader

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